Absa Agri Trends Report – 2 February 2018

Lower wheat production and its effect on the economy

The expected commercial production of wheat in South Africa is about 1.4 million tons, which is almost 23% less than the previous season. The decline was driven by poorer than expected yields, especially in the Swartland area. In the Western Cape 325,000 ha of wheat had been planted of which 200,000 hectares had been planted in the Swartland. Importing plans are already underway to supplement SA’s local demand for wheat. Looking solely at the wheat industry in the Western Cape, the industry estimates a loss of about R1.7 billion to R2 billion in gross incomes.
Summer rainfall areas are likely to receive late summer rains, which could result in late winter rainfall again for the Western Cape. However with prudent financial planning, risk mitigating strategies and sustainable farming practices we believe our producers will find a way to get through this challenging time and prosper!

Click here for the Absa Agri Trends Report.

 

SA fuel prices set to decline in February 2018 - (Agbiz) 18 January 2018

After a positive start to the year with a marginal decline in fuel prices, February 2018 could bring a further reduction in fuel prices, thanks to the stronger domestic currency. It is still early to be certain about the scale, but the current estimates suggest that prices of petrol and diesel could fall by 3% and 1%, respectively, from January 2018 levels. 

From an agricultural perspective, this relief comes at a period that is characterized by reduced activity in the farms, thus lower fuel consumption. Meanwhile, agribusinesses’ could experience an increase in activity, transporting commodities across South Africa. It is worth noting that roughly 81% of maize, 76% of wheat and 69% of soybeans in South Africa are transported by road. On average, 75% of national grains and oilseeds are transported by road. 

Read more: SA fuel prices set to decline in February 2018 - (Agbiz) 18 January 2018
 

South African Agricultural Commodities Weekly Wrap - (Agbiz) 15 December 2017

Apart from the USDA’s World Agricultural Supply and Demand Estimates report, and domestic weekly grain trade and producer deliveries data, this was a fairly quiet week in the South Africa agricultural commodities markets. 

The grains and oilseeds prices ended the week on a mixed footing. White maize and oilseeds closed in positive territory, although marginal, up by an average of 1% from the previous week. Meanwhile, yellow maize and wheat lost ground with bearish pressure emanating from lower international prices. 

The fruit and vegetable prices were volatile throughout the week with lower stock levels underpinning the market. The SAFEX beef carcass market remained flat this week due to thinly traded volumes. 

Next week, the National Crop Estimate Committee will release its fifth production estimates for winter crops. This could show a decline in wheat crop estimates following drier weather conditions in the Western Cape province, which in turn negatively affected the yields.

Click here to view the full Agbiz South African Agricultural Commodities Weekly Wrap.

 

Absa Agri Trends Report - 7 December 2017

Improved seasonal demand is supporting the livestock industry


Livestock prices are recording strong gains, and this may be due to strong demand associated with the festive season. During the first week of December, the Average Class A beef price reached R46.53/kg, 22% higher compared to the same period a year ago, whilst the average Class A lamb price increased and traded at a record price of R81.24/kg, which is 29% higher year on year. The poultry and pork markets are also showing favourable gains. The extend at which prices have increased are also due to reduced stock as a result to the 2016 drought. Weather forecasters indicate that La Nina development is taking place that will hopefully improve summer rainfall conditions as we are in the new pasture growing season. Rainfall outlooks for the rest of the season are still favourable for the summer rainfall area. The expected rainfall may replenish soil moisture and revive grazing conditions.

Click here for the Absa Agri Trends Report.

 

Absa Agri Trend Report - 30 November 2017

Absa Agri Trend Report - 30 November 2017 

 

The downgrade as noted by S&P and the decision to review SA’s rating for a further downgrade by Moody’s on Friday on the 24th November 2017, will negatively impact the cost of imported production inputs such as fertilizer, fuel and agricultural precision technology, machinery and implements due to the depreciating Rand. Agricultural producers are heavily reliant on access to affordable inputs and machinery. A lower Rand creates bigger production costs. Moody’s decision to downgrade Eskom, means the SOE will be restricted to access to capital market and other sources of funding. In order to generate funds, it could mean a possible electricity rate hike for the end consumer and largely the producer. South Africa being a net exporter of agricultural commodities, a weakening Rand, may paradoxically improve the rate of maize exports and increase earnings from exports.

Read more: Absa Agri Trend Report - 30 November 2017
 

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